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Legal aspect of money laundering

How it impacts socio-economic condition of Bangladesh

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11th-Jan-2020       
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Taimur Alam Khondaker :
Money Laundering is a white collar crime as wells it is an organized crime which is going on not on the basis of ideology, but with a target to make profit to gain power and wealth. But sometimes the terrorist organization takes the opportunity of Money Laundering for raising their fund to purchase Arms and ammunition and for maintenance of military Group.           
Money laundering is the process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process "launders" it to make it look clean. Money laundering is itself a crime. Money laundering is involved with transnational security issues which are also known as Transnational Financial crime also. Bangladesh is often considered a safe haven for financial crime. Hunde which is also known as hawla, a black market money exchange procedure, is a commonly used mode of transaction for cross-border money transfers. The types of money Laundering is mentioned in below:

(a)    Corruption: Abuse of public power or position for personal/group gain.
(b)    Tax evasion: Remaining outside the tax net, non-disclosure of actual income, non-payment of income tax, underhand agreements with the tax authority, gross abuse of the tax holiday provisions etc.
(c)    Loan defaulting: Intentional defaulting, siphoning off money from the authorized ventures for which the loan was taken.
(d)    Regular fraud: Pyramid savings schemes, misleading overseas job seekers (recently local job seeking has also been investigated). Counterfeit notes are also an area of concern.
(e)    Smuggling: An estimated US$1 billion worth of dutiable goods are smuggled each year into Bangladesh from India alone [Reference: The Council for Asian Transnational Threat Research (CATR), 2010].       

Organized crime used for money laundering:  

The FBI currently defines organized crime "as any group having some manner of a formalized structure and whose primary objective is to obtain money through illegal activities. Such groups maintain their position through the use of actual or threatened violence, corrupt public officials, graft, or extortion, and generally have a significant impact on the people in their locales, region, or the country as a whole."
Frank Hagan attempted to bring out common elements of the various descriptions of organized crime and developed a definition, based on a consensus of writers of the past 50 years, reads as follows:
"Organized crime functions as a continuing enterprise that rationally works to make a profit through illicit activities and that it ensures its existence through the use of threats or force and through corruption of public officials to maintain a degree of immunity from law enforcement. Organized crime tends to be restricted to those illegal goods and services that are in great public demand through monopoly control of an illicit market."

Legal aspect of money laundering

There is no specific definition of money laundering in the statue of Bangladesh. The Government has enacted a law to prevent money laundering under the title "The Money Laundering Prevention Act' 2002" which came into force on 30/4/2002.
But law was silent in this Act regarding the clear cut definition of money laundering. Against the section 2(13) of the said Act punishment was imposed to suffer imprisonment from 6 month to 7 years and fine will be double of the concerned money which was involved in money laundering.
He said law was also silent regarding for punishment of money laundering offence. Regarding punishment it was stated up to 7 (Seven) years imprisonment. It was not clearer in the said law wheatear the imprisonment is regorous or simple. The criminals also took benefit of silence part of the law. As such the money launder were taking the benefit of law escape them self from punishment.
To fill up the lacuna of law later on further the government has passed the following law to prevent the crime of money laundering:
(1) Money Laundering Portirod Ain' 2009.
(2) Money Laundering Portirod Ordinance 2012.
(3) Money Laundering (Amended) Ordinance 2015.
(4) Money Laundering Portirod (Amended) Ain' 2015.
(5) Money Laundering Prevention Rules' 2013.
(6) Money Laundering Prevention Rules' 2019.       

Opinion of experts regarding money laundering

(a)    Renowned banker Mr. Khondaker Ibrahim Khaled in his studies opined that "Black Money is now kept in Banks of many other countries apart from those in Switzerland." He gave a data of money laundering from the year 2013 to 2017 which is reads as follows:                           
(b)    That research organization namely "Global Financial Integrity" in their research found the following picture of Capital Flight from Bangladesh which is mentioned in billions of $.   

Legal process of money laundering:

(a)    Through high amount of invoice fixing the rate of imported materials other then actual rate in connivance of Bank High official the corrupt business man (Loanee) sending currency to deposit the balance amount in out side of Bangladesh.     
(b)    That Black Money Holder are purchasing second home out of Bangladesh through the difference agencies approved by the Government of Bangladesh.     
(c)    Money laundering is going on through commission of State Purchase by the High Office of the Government.
    Opinion of higher court regarding money laundering
(a)    To construe an offence of money laundering under the Ain it is not necessary to prove that money in question is to be transferred from Bangladesh to any other country or to be brought it to Bangladesh from other countries illegally. Rather, acquisition of wealth by illegal means, directly or indirectly, and illegal transfer, conversion, concealment of acquired wealth, either legally or illegally and aiding in accomplishing any of those acts may be considered as money laundering (Reported in 68 DLR 500).
(b)    Acquiring wealth illegally, directly or indirectly, and any illegal transfer, conversion, concealment of acquired wealth, either legally or illegally, and assisting in accomplishing any of those acts will come within the mischief of money laundering. Reference:- (Reported in 68 DLR 500).  
(c)    Dirty money belonging to a political class which was saddled with the responsibility of directing the affairs to the country had acted as a conscious part of the financial crime. This kind of corruption being backed by political influence threatens good governance, sustainable development, and democratic process. Reference:- 63 DLR Journal 21.  
(d)    In different periods of time there are some common elements for commission of offence which are that and these kinds of elements are sufficient for commission of offences. Any transfer or transformation of illegal money are punishable offences under section 4(2) which were clearly under section 13 of the Act, 2002 and under section 4 of Act, 2009 (Reported in 20 BLC 561).
(e)    No person other than Bangladesh Bank has any authority to lodge a complaint or investigate in relation to an offence committed under the Act. Reference (Reported in BLD 2009, Page-197).
(f)    In different periods of time there are some common elements for commission of offence which are that and these kinds of elements are sufficient for commission of offences. Any transfer or transformation of illegal money re punishable offences under section 4(2) which were early under section 13 of the Act, 2002 and under section 4 of Act (Reported 20 BLC 561).

(g)    This sort interference is nothing but illegal harassment amounts to high handedness of the police and creation of anarchy amongst the passengers traveling from one city to another city within the country and apparently an attempt of the police personnel to make themselves illegally benefited (Reported 19 BLC 125).
(h)    Money Laundering is deemed as a financially based crime. It has potentially devastating economic security and social consequences. From the first information report and charge-sheet it cannot be said that no prima-facie case could be detected against the accused persons (Reported 64 DLR 444).
Involvement of sate owned Bangladesh Bank  
(a)    That the system loss, corrupt practice of so-call politician is a matter of route of money laundering. An amount of huge in number was transmitted from Bangladesh Bank to outside by way of malpractice of digital computer system. The case was transferred to C.I.D for investigation. But the C.I.D (even now) has failed bring the criminal into Book. It may be noted that High official of Bangladesh Bank was involved with the occurrence.      
(c)    In Bangladesh, the prime cause of money laundering is lack of political transparency and good governance which has created and encouraged corruption in all sectors of the society. The second reason is huge informal employment and unimaginably high informal transaction in the economy that left lots of undefined sources. Lastly political instability or pseudo stability is a major concern for the riches that somehow compel them to look for external destination. The vacuum of private sector investment is another major outcome of money laundering in Bangladesh.
    Public perception regarding money laundering:  
(a)    That there is a very bad impression of the public regarding transferring money from Bangladesh to other countries.
(b)    Ex-Minister and one of the leaders of the ruling party Mr. Rashed Khan Mannon declared that a currency amounting to Taka Nine Lac Thousand has gone under Money Laundering for last 10 years (News dated 30/12/2019 published on National Dailies).
Impact of money laundering on socio economic condition on Bangladesh:  
(a)    That money laundering is a saposticatid crime by the higher level people of the country where elite people, government high official including the high ranking bank officials and Ministers are involved here with.
(b)    Bank loan is a good instrument of the money laundering.
(c)    Bank gives loan to loan seekers to development of Industry with an intention (1) for Employment of unemployed people, (2) Manufacture the industrial product by using local Raw Materials, (3) Export the product & (4) Gain the Forign currency. But most of the loan beneficiary transfer the loan money other wise out side the country. As a result the industry became sick and the rate of unemployment going to be increase day by day.
(d)    That by way of money laundering a group of people became very much richest and most of the peoples are going to be poor. For example it can be said that who was owner of 10 decimal of land he has lost the total land to maintain his family members, on the other side who was owner of the 200 Bigha of land, he became the owner of 500 Bigha.
(e)    Due to cause of money laundering discrimination is going increase day by day in between the middle class and higher class people.
(f)    That the middle class people are going to be crush due to yellow effect of money laundering.
Some recommendations regarding prevention of money laundering:            
(1)    That government should find out the policy to encourage the people to invest money in the country.

(2)    The Income Tax department and other department must take the view and facilitate the people for investment.

(3)    That the law enforcing agencies have to be carious and take strong measure to stop the route of money laundering.

(4)    That government has taken a serious step to stop money laundering and as such a memo of under standing has signed on 29/12/2019 in between C.I.D & BFIU as reported in a National Daily which is reads as follows :-   

    “মানিলন্ডারিং প্রতিরোধে পুলিশের অপরাধ তদন্ত বিভাগ (সিআইডি) ও বাংলাদেশ ফিন্যান্সিয়াল ইন্টেলিজেন্স ইউনিটের (বিএফআইইউ) মধ্যে একটি সমঝোতা স্মারক স্বাক্ষরিত হয়েছে। ২৯/১২/২০১৯ তারিখ সিআইডি হেড কোয়ার্টার্সে এই সমঝোতা স্মারক স্বাক্ষরিত হয়। অনুষ্ঠানে সিআইডির পক্ষে উপ¯ি'ত ছিলেন সিআইডি প্রধান অতিরিক্ত আইজিপি চৌধুরী আব্দুল্লাহ আল-মামুন। বিএফআইইউ প্রতিনিধিদলের নেতৃত্ব দেন এর প্রধান ও বাংলাদেশ ব্যাংকের ডেপুটি গভর্নর মোঃ রাজী হাসান। সিআইডির অতিরিক্ত আইজিপি চৌধুরী আব্দুল্লাহ আল-মামুন বলেন, মানিলন্ডারিং প্রতিরোধে বিএফআইইউ এবং সিআইডির মধ্যকার সমঝোতা স্মারক স্বাক্ষর বাংলাদেশের অর্থনৈতিক প্রব"দ্ধিতে যুগান্তকারী ভূমিকা রাখবে। সিআইডির পাঠানো এক সংবাদ বিজ্ঞপ্তিতে বলা হয়েছে, বাংলাদেশ পুলিশের পক্ষে সিআইডি মানিলন্ডারিং প্রতিরোধে একনিষ্ঠভাবে কাজ করে যা"েছ। মানিলন্ডারিং প্রতিরোধের এই যুদ্ধে সিআইডি এবঙ বিএফআইইউ একযোগে কাজ করে যা"েছ। এই কাজে আরো গতিশীলতা আনতে সিআইডি এবং বিএফআইইউ বদ্ধপরিকর। সেই লক্ষ্যে দুই প্রতিষ্ঠানের মধ্যে এ মেমোরান্ডাম অব আনডারস্ট্যান্ডিং (এমওইউ) স্বাক্ষরিত হয়েছে। অনুষ্ঠানে আরো উপ¯ি'ত ছিলেন সিআইডির ডিআইজি (ইনভেস্টিগেশন অ্যান্ড ইন্টেলিজেন্স) ইমতিয়াজ আহমেদ, অ্যাডিশনাল ডিআইজি মোঃ কামরুল আহসান, বিশেষ পুলিশ সুপার (অর্গানইজড ক্রাইম) মোঃ মোস্তফা কামাল, বিএফআইইউয়ের নির্বাহী পরিচালক মোঃ ইস্কান্দর মিয়া প্রমুখ।”

(5)    That high ranking leaders of ruling party should not be allowed to interferer on the activities of the law enforcing agencies who will take step to stop and take legal action against the offender.    

(The writer is a columnist and advocate (Appellate Division). E-mail No: taimuralamkhandaker@gmail.com)

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